Yesterday was an epic, game-changing day for Google (NASDAQ:GOOG). It alters the landscape in the smartphone industry. In one expensive move, Google made its first foray into proprietary hardware territory. The move was another kick in the head for top competitor Research In Motion (NASDAQ:RIMM).
Google is now a hardware manufacturer. Never in the history of the company has it produced a product that consumers can actually hold in their hand.
At $12.5 billion, the purchase of Motorola Mobility (NYSE:MMI) is a drop in Google's big cash bucket. Motorola produces high-quality phones and has a clean reputation with most consumers in the smartphone industry (not like RIMM). This will be a major leap for Google and a catalyst to propel it higher in the coming years.
MMI lacked a marketing catalyst and its brand was lost in the shuffle. That made it a prime candidate for Google to snap it up.
That, and this: Motorola Mobility's 17,000 patents.
They are a sort of immunity to the lawsuits that happen so frequently in the smartphone industry. With the patents in its pocket, Google can focus on creating a "super phone" that integrates all the best features of its Android system with a sleek, functional, high-quality piece of hardware.
Apple is the only other company that does this. But unlike Apple, Google will still license its operating system to other phone manufacturers. That means increased partnerships with demand for new apps and functions. This could hurt Apple.
Apple doesn't share well. It must have missed that lesson in kindergarten. The company lost a similar battle to Microsoft in the '80s. Apple only offered its operating system on its own computers, while Bill Gates let anyone buy a copy. This sent Apple into a 12-year hole and made Microsoft one of the most profitable companies in history.
It may not be that bad this time around, but Apple has a serious, more powerful contender in Google (Android). It's now both the top-selling mobile platform in the world and the largest aggregator of all types of information in the world.